US To File WTO Suit Against China For Trade Law Violations

Update II (11:00 am ET): A Chinese envoy has reportedly complained to the WTO about the US threatening to bring a case against it when the US had clearly ignored the rules, the envoy claimed.

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Update (10:30 am ET): US Trade Representative Robert Lighthizer said late Thursday morning that he sees Brazil, Argentina and the EU to be added to the list of exemptions to steel and aluminum tariffs.

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Yesterday, a flurry of media reports pertaining to the size of anti-China tariffs, and the timing of their announcement, suggested that the Trump team was still working to iron out the details. But with less than five hours to go until Trump's 12:30 ET announcement, the Wall Street Journal quietly reported Thursday morning that the US is also expected to announce a lawsuit against China at the World Trade Organization for trade law violations. The tariffs would be assessed separately without going to the WTO.

The aggressive move comes a day after the WTO said on Wednesday that the US "did not fully comply with a 2014 ruling against its anti-subsidy tariffs on a range of Chinese products." Indeed, the WTO has ruled against the US and US companies several times in recent years. That was the perceived advantage of pursuing actions under Section 301 of the US Trade Act: It would allow the Trump administration to effectively circumvent the WTO.

The U.S. is also expected to announce it would sue China at the World Trade Organization for trade law violations. The tariffs would be assessed separately without going to the WTO.

Trump officials had earlier said that the tariffs would apply to about $30 billion in Chinese imports. An accompanying report on Chinese trade practices is expected to estimate that the harm to the U.S. from improper technology transfer to Chinese firms is $30 billion annually. Beijing improperly forces U.S. firms to transfer their technology to Chinese joint venture partners as a requirement to do business in that nation, the U.S. trade officials allege.

It’s not clear why the administration appears to have settled on a larger number. On Wednesday, U.S. Trade Representative Robert Lighthizer said the U.S. was using a computer algorithm it developed to decide which products to target. The U.S. is looking to restrict imports of goods that would harm Beijing, but cause relatively little harm to U.S. consumers and companies.

Trump has said that the tariffs would apply to a list of 100 products, primarily technology exports.

Meanwhile, reports surfaced Thursday that the US would be seeking a dialogue with the European Union about tariffs as Trump insists that the US would never again tolerate unfair trade practices.

For years, China has demanded US companies turn over invaluable source code and other intellectual property as a price of admission to the Chinese market. China has also vowed to retaliate.

Thursday's announcement will be the culmination of an investigation that Trump ordered in August.

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Commerce Secretary Wilbur Ross revealed Thursday morning that the US is "processing" between 100 and 200 applications for exemptions to the aluminum and steel tariffs recently adopted by the US. Already, Canada, Mexico and Australia have been granted exemptions.

At this rate, it looks like the US could grant exemptions to everybody but China. Which, of course, is the whole point: To harden the rest of the world against China as the US struggles to defend its hegemonic dominance of global markets against the challenger that poses the greatest threat.